WASDE: Corn for ethanol up; offsets keep ending stocks unchanged

Once again, the USDA ratcheted up its projections for corn use for ethanol production by 50 million bushels to 5.45 billion for the 2016/17 marketing year, saying it is based on the most recent data from the Grain Crushings and Co-Products Production report. The April World Agricultural Supply and Demand Estimates report said the crushings report "estimated the amount of corn used to produce ethanol to be record high during December-February. The pace of weekly ethanol production during March as indicated by Energy Information Administration data has also been above expectations.”

Projected ending stocks of corn for the current marketing year, however, remain unchanged at 2.32 billion bushels, as USDA reports an offsetting reduction of 50 million bushels for projected feed and residual use to 5.5 billion bushels. Projected ending stocks for the current marketing year are expected to be higher than the ending stocks for the previous year, which were 1.74 billion bushels. The season-average corn price projected to be received by producers is unchanged from last month's WASDE report at the midpoint with the range narrowed to $3.25 to $3.55 per bushel.

Global coarse grain projections are up, forecast 4.4 million tons higher to 1.34 billion tons. Brazil corn production is raised primarily on larger projected second crop area. The latest government data indicate a higher-than-expected expansion of area in both the Center-West and North. Argentina corn production is increased on the latest harvest results indicating better-than-expected yields. Other major corn production changes include increases for Mexico, Indonesia, Pakistan and South Africa, with reductions for Paraguay, Ecuador and Russia.

Major global trade changes for 2016/17 this month include higher projected corn exports for Brazil and Argentina, with increased competition from these countries expected to impact the 2017/18 marketing year in the United States. Corn imports are raised for Mexico, with mostly offsetting reductions for Indonesia, Venezuela, Philippines, and Colombia. Foreign corn ending stocks are raised from last month, with the biggest increases for Mexico, Brazil, Indonesia, and Argentina.